The new labour code was supposed to come into effect from April 1, but the central government has postponed its implementation. There are very few hopes of seeing this code being implemented in the near future. The uncertainty of the second wave of covid-19 is a major reason behind this delay. The new labour laws limit the maximum basic pay to 50 per cent of CTC, thus effectively increasing the Gratuity bonus to be paid to the employee. However, due to the salary structure rejig, the employees are likely to see a reduction in their take-home pay.
Companies not ready due to Covid
Due to the ongoing Covid-19 crisis has, companies haven’t got enough time to prepare for this new law. The delay will additional time to companies to change the salary structure of their employees. The second wave of infections has derailed work across most of the companies.
Industries Organization’s appeal for concession
Reportedly, companies are demanding to waive the rule for fixed 50% allowances in employees’ CTC. The companies are saying that they will face major financial losses with the rules of the new labour code. Many industry associations have also appealed to waive off the provisions in the proposed wage code.
Effects On Public
The main focus of the new labour code is to fix 50% allowances in every employee’s cost to company salary (CTC). This means the basic pay of every employee would be 50% of the CTC. With the implementation of the new labour code, it would be compulsory for each and every company to apply it in the salary structure of their employees. Most of the companies do not pay 50% as basic pay to their employees. Apprehensively, there would be deductions in the in-hand salary of the employees once this New Labour code is implemented. The amount deducted for the provident fund (PF), which is fixed at 12% of the basic salary will be increased with a hike in basic pay. This means all the extra amount contributed towards PF will be locked in for 15 years as a retirement plan.
Therefore, if the new labour code gets delayed further or the government accepts the industries’ demand, it will be good news for the employees.
(Follow Money9 for latest Personal finance stories and Market Updates)
In a joint term insurance plan, not many insurers provide add-on covers along with a primary joint life insurance plan
So far, there is some evidence of a change in consumption pattern based on high-frequency consumption indicators for consumers in advanced economies
We should see more small investors take to ETF and passive investing in certain categories such as large-cap equities where active funds are lagging
Both Centre and the states are overly dependent on petroleum taxes. They may not ease their grip on them